The greenback snapped its three-day streak of declines with the United States dollar index rising 0.4% to 95.17 last Friday. However, the dollar finished the week down about 0.6%, registering its worst week since early September. According to Scotiabank’s foreign exchange strategists, the dollar came under pressure last week because investors seemed to believe that the greenback had peaked. The concerns over the Federal Reserve’s impending interest rate hikes also contributed to the decline.
Prices of precious metals are largely tied to the U.S. dollar. Precious metal prices tend to rise when the dollar weakens. In addition, money managers are advising investors to put money into emerging market stocks and gold. Historically, emerging markets’ values have an inverse relationship with the U.S. dollar.
